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Thu, 14 Mar 2019 22:58:48 +0000en-UShourly1https://wordpress.org/?v=4.9.10Kim Kardashian West Won the First CFDA Influencer Award: Will A CGI Supermodel Be Next?https://www.coveringyourads.com/2018/08/articles/advertising/cfda-influencer-award-digital-models/
https://www.coveringyourads.com/2018/08/articles/advertising/cfda-influencer-award-digital-models/#respondThu, 02 Aug 2018 17:31:50 +0000https://www.coveringyourads.com/?p=1781It is no secret that the world of fashion is full of surprises. On Monday, June 4, 2018, Kim Kardashian West won the Council of Fashion Designer of America (“CFDA”) first-time Influencer Award and commented: “I’m kind of shocked I’m winning a fashion award when I’m naked most of the time.”[1] Fashion advertising and marketing...… Continue Reading

]]>It is no secret that the world of fashion is full of surprises. On Monday, June 4, 2018, Kim Kardashian West won the Council of Fashion Designer of America (“CFDA”) first-time Influencer Award and commented: “I’m kind of shocked I’m winning a fashion award when I’m naked most of the time.”[1] Fashion advertising and marketing rely more and more upon social media and influencers for the ability to connect with consumers in an authentic manner.[2] As a result, fashion models and celebrity influencers are in high demand. Now, a new group of unique model influencers are taking the fashion world by storm. Yet, it is unlikely that any of these new influencers will ever win the CFDA Influencer Award.

Miquela Sousa, also known as “Lil Miquela,” is from Los Angeles, California. She has more than one million Instagram followers. She is a singer, songwriter and model and can be seen on Instagram, Facebook, Twitter and Tumblr partying in Los Angeles clubs, attending art gallery openings, wearing designer clothes and, of course, posting selfies. In August 2017, she successfully released her first single “Not Mine” on Spotify, which now has nearly 1.5 million plays. She has collaborated with such brands as Stussy, Vans, Born x Raised, Balmain, Pat McGrath and Tesla. She has used her position as an influencer and extensive following to support numerous causes, including Black Lives Matter, transgender rights, gun control, feminism, Planned Parenthood and protests of the Dakota Access Pipeline. She looks, writes, and acts like a real person but she is a computer generated image (“CGI”).[3]

Instagram: @lilmiquela

If you scroll through her Instagram account, @lilmiquela, this conclusion may not be obvious. Miquela was digitally actuated by Trevor McFedries and Sosa Decou at Brud in 2016.[4] Miquela launched Prada’s GIFs, in a partnership with both Prada and Giphy, and dons garments made by Diesel and Moncler in her Instagram posts.

Shudu Gram (@shudu.gram) is an African model who has gained the attention of many instagrammers and has accumulated over one hundred thirty thousand followers in a short period of time. On February 8, 2018, Fenty Beauty, the beauty brand created by famed singer Rihanna, reposted a picture of Shudu wearing a shade of its foundation 490, causing a frenzy about Shudu and her association with Fenty.[5]

Instagram: @shudu.gram

Shudu has been called the world’s first digital supermodel. She was created in April 2017 by twenty-eight-year old British photographer Cameron-James Wilson. Her debut created controversy, especially given the historic lack of black representation in the fashion industry.[6] Mr. Wilson said his biggest influence in creating Shudu “was a special-edition Princess of South Africa Barbie doll.”[7] Reporters also commented that they believed that Shudu was a living person.[8] To complicate matters, digital models such as Lil Miquela and Shudu also have been featured in social media posts with live celebrities and models.[9] Other CGI models also have been used to promote such brands as Dior and Louis Vuitton.[10]

Fashion brands which have chosen these CGI digital models instead of real models to advertise and promote their products save money on producing a fashion shoot at a picturesque location and hiring models, photographers, and stylists by using AI to create the same looks by computer. Aside from the obvious lack of authenticity by displacing supermodels and celebrity influencers, there are potential legal issues that arise in the United States with respect to the use of digital models.

Last year, the FTC updated its Endorsement Guidelines, requiring advertisers and influencers promoting their brands and products to make clear when they have received material consideration to feature or promote a product or brand in social media under a contractual arrangement by using specific hashtags or captions such as # ad or # sponsored.[11] Digitally-created influencers raise the issue of whether virtual influencers are bound by the Guidelines and, if so, who or what entity would the FTC hold responsible for a digital model’s “failure” to make the proper disclosures.” Similar transparency regulations exist for other international jurisdictions.[12]

In addition, if a digital model’s body type is not realistic under human standards, would any advertisement or social media posting featuring the digital model be subject to international standards relating to advertising and body image.[13] Given that the CGI models are advertising apparel and beauty products for actual humans, it would follow that entities such as the ASA in the United Kingdom would regulate these changes.[14]

Further, are these digital models protectable and, if so, who holds the rights to their persona or image? Deciding whether copyright law would treat an avatar or CGI influencer as protectable as a separate “original work of authorship” that is “fixed in a tangible medium” may involve a complicated fact analysis, depending upon the circumstances.[15] That being said, famous copyrighted characters such as Betty Boop and Minnie Mouse can be seen a precursors to Lil Miquela and Shudu Gram from the dawn of the motion picture era.[16]

The impact of the increased use of CGI influencers and models is yet to be determined and questions remain regarding the legal framework that should be applied to their online activities. If your company aims to create or use such a CGI model or influencer, you should follow the Guidelines and provide proper disclosures as if the model was, in fact, human. You also should make sure you protect the intellectual property that is comprised of the model or celebrity. As for other issues that may arise, like you, we will remain abreast of legal developments so we may best advise you on how to protect your fashion designs and advertisements. As this phenomena grows, if it does, courts may provide additional guidance on these issues.

[3] Miquela’s Instagram and other social media posts often elicit questions from followers as to whether she is real or not. Her recent Instagram posts reflect her confusion with being CGI and in the past she was engaged in a feud with a self-professed robot-rights activist Bermuda (@bermudaisbae), who was also created by Brud. As was reported in Elle: “The company concocted the entire dramatic, hype-building episode to garner attention.” https://www.elle.com/culture/a21272102/almost-human-july-2018-miquela-shud-profile/.

[8]http://www.businessinsider.com/shudu-gram-is-a-fake-instagram-star-2018-5 (“Here’s how I was first taken in by Shudu Gram. In an image posted late last summer, Shudu captioned a photo of herself with an apparent ode to the clothing brand SOULSKY, writing, “I can’t describe how grateful I am to @soulskybrand for sending me this beautiful t-shirt. I hope the picture does it justice ”).

[12] The International Consumer Protection and Enforcement Network is comprised of consumer protection agencies from over sixty countries and has published guidelines developed to help parties comply with truth-in-advertising principles for endorsements for online reviews and endorsements. For example in the United Kingdom, the Competition & Markets Authority sought undertakings from UK advertising agencies that they will not breach consumer protection legislation when working with influencers and the Advertising Standards Authority (“ASA”) and Committee of Advertising Practice has issued guidelines for vloggers.

[13] For example, the United Kingdom’s Advertising Standards Authority banned a Gucci advertisement where a model’s “torso and arms were quite slender and appeared to be out of proportion with her head and lower body” and “her pose elongated her torso and accentuated her waist so that it appeared to be very small. https://www.asa.org.uk/rulings/guccio-gucci-spa-a15-321743.html#.VwTfz3o3n_Q; see Do We Need A Truth in Advertising Act? The Industry and Retailers Self-regulate Photography Ads. Similar decisions regarding body image involved Yves Saint Laurent SAS and the depiction of a model who appeared unhealthily thin, https://www.asa.org.uk/ratings/yves-saint-laurent-sas-a15-2g2161.html, and an advertisement for swim and summer wear which featured an unhealthily thin model. https://www.asa.org.uk/ru/regs/drop-dead-clothing-ltd-a11-164206.html.

[14] The ASA held that advertisements featuring a “naughty elf” CGI character in series of posts on Poundland’s Twitter and Facebook page, to promote the #ElfBehavingBad campaign in December 2017, breached CAP Code Rules 1.3 (social responsibility) and 4.1 (harm and offense). See https://www.asa.org.uk/rulings/poundland-ltd-a17-408906.html.

The complaint, brought by the FTC’s Bureau of Consumer Protection (“BCP”), was against two online gaming influencers, Trevor Martin (a/k/a TmarTn), Thomas Cassell (a/k/a TheSyndicateProject, Tom Syndicate, and Syndicate), and their corporation CSGOLotto, Inc. (“CSGOLotto”). The BCP alleged that Martin and Cassell (1) did not disclose their ownership in CSGOLotto, (2) were paid to endorse the online platform’s gambling service and (3) asked other gaming influencers to promote the service in exchange for payments between $2,500 and $55,000 without making them disclose such payments. In response to the complaint, neither Martin, Cassell, nor CSGOLotto admitted or denied the allegations, but instead agreed to enter into an Agreement Containing Consent Order with the FTC (the “Order”). The Order prevents them from misrepresenting an endorser of the product or service as an independent user or ordinary consumer of same and requires them to clearly and conspicuously state if the endorsers have a material connection to the product or service.

The Order led to an increase in questions about necessary disclosures when influencers and endorsers receive a benefit for discussing a product or service. In response to these inquiries, the FTC updated its FAQ document “The FTC’s Endorsement Guides: What People Are Asking”. The FAQ document states that the guiding principle behind the regulations is that the relationship between the influencer and product must be clear to the audience. It also answers additional questions related to proper disclosures, like how often and where the disclosure needs to appear.

On September 20, the FTC hosted a live Q&A session on Twitter called “Social Media Influencers,” using the tag “#influencers101,” to respond to questions from twitter users. The FTC fielded a number of questions including: (1) Do the built-in disclosure tools on social media platforms meet FTC standards? (2) When are disclosures necessary? and (3) When does the U.S. law apply? The FTC articulated that it “is only concerned about endorsements made on behalf of a sponsoring advertiser.” A key factor in determining if a disclosure or notice is necessary is whether the influencer received a benefit (e.g. free product, paid trip, dollar amount) from the sponsor that may have changed or influenced his or her opinion of the product or services. If a benefit or potential benefit was received, a disclosure is necessary. If the influencer posts about a product or service that he or she “just happens to like”, a disclosure likely is not necessary.

What can we take away from the FTC’s recent actions, guidelines and discussions? Three themes: (1) The FTC is turning more of its attention to regulating nontraditional means of advertising in hopes of protecting social media platform users from misleading advertisements and endorsements, (2) the audience (i.e. ads directed at U.S. consumers) triggers these rules, not the location the endorser is posting from, and (3) disclosures must meet specific standards.

Disclosures should be (1) “clear and conspicuous” (i.e. hard to miss and understandable), (2) in “close proximity” to the endorsement, representation or advertisement, and (3) convey the “material connection” between the product and influencer.

During the Twitter session, the FTC further articulated what it means to be “clear and conspicuous” and provided some takeaways:

Put disclosures in the first three lines of the post;

Use hashtags like “#ad” or “#paid” at the beginning of the post and do not bury them amongst other links and hashtags. Hashtags like “ambassador” are not sufficient;

Superimpose a disclosure over your Snapchat or Instagram stories and keep in mind that followers have to have time to read the disclosure;

In a series of disappearing posts, you may only need a disclosure on the first post if the disclosure stands out and viewers have time to process the disclosure before the next post appears;

If your followers know you are a paid spokesperson, you do not need to include a disclosure every time you post about the product. However, if a “significant portion of your followers” are unaware of the relationship, you need to disclose it each time;

If you are hosting a giveaway funded by a third party, state that it is sponsored by a third party;

You do not need to list everything you received from a company to review a product. You can say you were paid or that you received an all-expense paid trip;

If you work for a brand and post about a product, disclose your connection to the brand, even if you were not paid an additional amount to post about the product;

If you are the brand, monitor and follow up with the influencer to make sure that he or she has followed your written advice about disclosure; and

Do not rely on built-in tools (e.g. “Paid” tag on Facebook or “Includes paid promotion” mark on YouTube) for disclosures.

]]>https://www.coveringyourads.com/2017/09/articles/advertising/paid-post-ftcadvice-influencers/feed/0#CAUTION: FTC Ramps Up Enforcement of and Education on Social Media Influencer Disclosure Requirementshttps://www.coveringyourads.com/2017/09/articles/advertising/social-media-influencers-disclosure/
https://www.coveringyourads.com/2017/09/articles/advertising/social-media-influencers-disclosure/#respondTue, 19 Sep 2017 19:44:29 +0000http://www.coveringyourads.com/?p=1740In 2017, being a “social media influencer” can mean big bucks. Companies are increasingly eager to pay individuals with large social media followings substantial sums to promote products in the hopes of reaching millions of potential customers quickly. And consequently, the Federal Trade Commission (the “FTC”) is paying attention more than ever. If you’re being...… Continue Reading

]]>In 2017, being a “social media influencer” can mean big bucks. Companies are increasingly eager to pay individuals with large social media followings substantial sums to promote products in the hopes of reaching millions of potential customers quickly. And consequently, the Federal Trade Commission (the “FTC”) is paying attention more than ever. If you’re being paid to promote a product on your Instagram account, the FTC wants you to let the world know. . . or else.

This recent increase in social media policing by the FTC follows its 2015 updates to its Guides Concerning Use of Endorsements and Testimonials in Advertising (the “Endorsement Guides”). The Endorsement Guidelines apply to both marketers and endorsers, and state that if there is a “material connection” between an endorser and the marketer of a product (i.e., a connection that might affect the weight or credibility that consumers give the endorsement), that connection should be clearly and conspicuously disclosed, unless the connection is already clear from the context of the communication containing the endorsement.

Earlier this month, in a symbolic action demonstrating the federal government’s increased efforts to combat misleading advertising in social media, the FTC settled its first complaint brought against individual social media influencers. In 2015, the FTC launched an investigation into the activities of Trevor “TmarTn” Martin, Thomas “Syndicate” Cassell, two widely followed online gaming influencers, and their company, CSGOLotto, Inc. (“CSGOLotto”), based on Martin and Cassell’s YouTube videos of themselves gambling with virtual currency on their online multi-player shooter game website while encouraging others to do the same. While the YouTube videos promoted CSGOLotto as a place to win big money quickly, the videos failed to disclose that Martin and Cassell were the company’s respective president and vice president. According to the FTC’s complaint, Martin, Cassell, and their company also had an “influencer program” and paid other gaming influencers between $2,500 and $55,000 to promote the CSGLotto website to their social media followers, and also barred those influencers from any negative reviews of the website. In addition to alleging that Martin and Cassell’s videos failed to disclose their ownership of and senior roles with the company, the FTC additionally alleged that the gaming influencers’ social media posts deceptively failed to adequately disclose that the influencers received compensation to promote the gambling service.

To settle the matter, Martin, Cassell, and CSGOLotto, Inc. entered into an agreement with the FTC (with a proposed order) whereby they are prohibited from misrepresenting that any endorser is an independent user or ordinary consumer of their gaming website, and also requiring clear and conspicuous disclosures of any unexpected material connections with endorsers.

The CSGOLotto settlement is but one of many recent actions the FTC has taken to increase enforcement of and compliance with its Endorsement Guidelines. For example, following up on its April 2017 sending of 90 educational letters to social media influencers and brands, informing them of the FTC’s “material connection” disclosure requirements, the FTC recently sent 21 of those same brands and influencers warning letters citing specific social media posts of concern, and requiring disclosure to the FTC of any material connections to the brands in the identified posts. The recent letters further asked the recipients to report what actions they will take to ensure compliance with the Endorsement Guidelines disclosure requirements.

Additionally, on September 7, the FTC also issued an updated version of its Endorsement Guides “What People are Asking” document, meant to provide guidance on frequently asked questions relating to the Endorsement Guidelines. The revised document includes additional information regarding disclosures of material connections by social media influencers.

This increase in enforcement and educational action by the FTC demonstrates a concerted effort to regulate conduct and protect consumers of a booming new media practice. Whether widespread compliance with the FTC’s requirements becomes the new normal remains to be seen, as thousands of new social influencers appear every day, many unaware of the Endorsement Guidelines. But certain applications such as Instagram are making compliance in disclosing paid posts even a little easier. In June, in response to the FTC’s warning to celebrity users, Instagram announced that it would provide influencers with the option to use a new “paid partnership with” sub-header on sponsored posts and stories to allow those influencers to easily tag the business with whom they have a paid relationship. Instagram also indicated in June that users should expect an official policy and enforcement approach by Instagram in the future regarding sponsored posts.

]]>https://www.coveringyourads.com/2017/09/articles/advertising/social-media-influencers-disclosure/feed/0A Deeper Dive Into the FTC Crack-Down on Social Media Influencers: What You Should Know Before You Posthttps://www.coveringyourads.com/2017/07/articles/ftc-endorsement-guidelines/ftc-social-media-influencers/
https://www.coveringyourads.com/2017/07/articles/ftc-endorsement-guidelines/ftc-social-media-influencers/#respondTue, 18 Jul 2017 16:29:25 +0000http://www.coveringyourads.com/?p=1727In our previous blog post, “Brands Beware!!! FTC Scrutinizing Influencer Posts for Compliance with Endorsement Guides,” we reported that the Federal Trade Commission (“FTC”) had issued more than 90 letters to brands and influencers, making it clear that it is paying close attention to influencer-based marketing. More recently, the letters have been made publicly available,...… Continue Reading

Several FTC letters were sent to influencers that could potentially be seen as having a personal relationship with a brand’s owner, such as Victoria Beckham with Dr. Harold Lancer of Lancer Skincare or Lucy Hale with Chiara Ferragni of Chiara Ferragni Collection. The agency reminded these celebrities that disclosure is required even in the absence of a business connection or if product is simply received free of charge.

Another group of letters addressed the inadequacy of disclosures consisting of influencers expressing gratitude to the brands. The FTC expressed concern that these types of disclosures fail to sufficiently explain the nature of the endorser’s relationship to the company. For example, Emily Ratajkowski’s “thanks @nipandfab” or Troian Bellisario’s “Thank you @understatedleather” were not considered appropriate disclosures.

Some influencers, known to the FTC for having existing business relationships with the brands, were singled out for lack of appropriate disclosures. For example, Ashley Benson was put on notice for her use of a hard to understand #sp hashtag in her endorsement post; Scott Disick, affiliated with Pearly Whites Australia, also was admonished for using an otherwise acceptable #ad hashtag, but placing at the end of his post; and Caroline Manzo, a paid spokesperson for HelloFresh, received a warning letter for using the #sp hashtag despite including a statement encouraging consumers to try her code ‘FreshCaroline.’

The FTC also indicated that using #[brandname]ambassador may be inappropriate, at least in certain contexts. Shay Mitchell, a brand ambassador for Biore, was cited for not validly disclosing her relationship with the brand even though she included “BioreAmbassador” in her post. The FTC did not provide an explanation as to why “BioreAmbassador” was insufficient, or whether it may be sufficient in other contexts (i.e., if she had included it more prominently, rather than at the end of the post, following emojis and a potentially confusing #TBT hashtag).

In other letters, the FTC made it clear that, while the #partner hashtag by itself is likely an insufficient disclosure, it may nonetheless be appropriate to use #[brand name]_partner. However, the agency also indicated that an abbreviated version of the brand name in that context may be insufficient due to consumers potentially not understanding the meaning of the abbreviation.

The FTC emphasized the importance of disclosing relationships, including in situations where the brands or products are owned by influencers and are “non-eponymous” (meaning that the brands are not named after the celebrities or influencers) because the public may not be aware of the relationship. For example, Sean Combs’ endorsement of AQUAhydrate water was flagged by the FTC as lacking disclosure, despite the fact that Mr. Combs is an owner and director of AQUAhydrate.

Takeaways:

All material connections should be disclosed, including:

Non-business relationships and friendships;

Free products;

Products owned by endorsers.

Disclosures should be clear and conspicuous, meaning:

Placed above the “more” button in an Instagram post;

Not hidden in a string of other hashtags and/or links.

Avoid vague and/or confusing disclosure hashtags:

Use #ad, #sponsored or #[brand name]_partner and place it at the top of the post;

]]>Khloe Kardashian is the latest Kardashian to find herself in court over her activities on social media. The youngest Kardashian sister was sued by a photographer for copyright infringement in Xposure Photos UK Ltd v Khloe Kardashian et al, 2:17-CV-3088 (C.D. Cal). Xposure alleges that Ms. Kardashian posted a photo it owned on her Instagram without permission and without the copyright attribution notice included on the original. For brands, celebrities, influencers, and others who use social media, particularly to make money or for promotion, this serves as a good reminder that all rights in any photographs, videos, and other content they post on social media must be cleared.

Many people assume based on the community nature of social media that they can post anything and are less careful than they would be on a website or other media. It’s just for fun and interest, right? But as the Xposure complaint points out, social media is commercial use and can reach extensive audiences. The complaint alleges that “Kardashian’s Instagram post made the Photograph immediately available to her nearly 67 million followers and others, consumers of entertainment news—and especially news and images of Kardashian herself, as evidenced by their status as followers of Kardashian—who would otherwise be interested in viewing licensed versions of the Photograph in the magazines and newspapers that are plaintiff’s customers.”

There are several layers of rights in any creative work, such as a photograph—including a selfie. The creator, artist, or photographer has rights in the image or work itself under copyright law. Any people appearing in the work have rights to their image under privacy laws. This is true even (or especially) for public figures and for the deceased. There could be protected trademarks appearing in the background or on clothing. In order to post a photograph or video that includes any of these rights, a license or waiver must be granted.

With the breadth and depth of content posted and the huge audience on social media, the rules that apply to content in other media apply just as much, if not more. Brands and their legal departments should work with their marketing and communications teams to develop a social media policy that governs the rules of the road on social media and avoids these common pitfalls. And always remember:

Clear all publicity rights

Clear all copyrights and trademarks and do not remove any copyright or trademark notices

]]>https://www.coveringyourads.com/2017/05/articles/copyright/kardashian-copyright-law/feed/0Brands Beware!!!! FTC Scrutinizing Influencer Posts for Compliance with Endorsement Guideshttps://www.coveringyourads.com/2017/04/articles/endorsements/brands-beware-ftc-endorsement-guides/
https://www.coveringyourads.com/2017/04/articles/endorsements/brands-beware-ftc-endorsement-guides/#respondMon, 24 Apr 2017 18:41:16 +0000http://www.coveringyourads.com/?p=1708In response to a petition from a coalition of consumer groups last year complaining about the need for disclosures by social media influencers, the FTC recently announced on April 19, 2017 that it had issued more than ninety letters reminding influencers and brands that “if there is a ‘material connection’ between an endorser and the...… Continue Reading

]]>In response to a petition from a coalition of consumer groups last year complaining about the need for disclosures by social media influencers, the FTC recently announced on April 19, 2017 that it had issued more than ninety letters reminding influencers and brands that “if there is a ‘material connection’ between an endorser and the marketer of a product – in other words, a connection that might affect the weight or credibility that consumers give the endorsement – that connection should be clearly and conspicuously disclosed, unless the connection is already clear from the context of the communication containing the endorsement.” The FTC explained that material connections could “consist of a business or family relationship, monetary payment, or the provision of free products from the endorser.” A copy of the form of the letter, which explains that clear and conspicuous disclosures are required can be found here.

The FTC raised specific posts with influencers and marketers that were featured in influencer posts. The FTC letter made clear that when disclosures are made they need to be made so that consumers can see them readily at the top of a post so that consumers will not skip over or miss them, meaning that a disclosure placed at the end of a string or below a “more” button is not likely to be conspicuous.

The FTC noted in its press release that “particular disclosures that are not sufficiently clear, pointing out that “many consumers will not understand a disclosure like ‘#sp,’ ‘Thanks [brand],’ or ‘#partner’” to mean that a post is sponsored. The FTC letters included copies of the Endorsement Guides (here) and the publication “FTC’s Endorsement Guides: What People are Asking” (here), both of which are useful for background information. The names of the influencers and brands were not publicly released.

]]>https://www.coveringyourads.com/2017/04/articles/endorsements/brands-beware-ftc-endorsement-guides/feed/0Using Hashtag #Disclosures in Social Media Advertisinghttps://www.coveringyourads.com/2017/01/articles/social-media/using-hashtag-disclosures-social-media-advertising/
https://www.coveringyourads.com/2017/01/articles/social-media/using-hashtag-disclosures-social-media-advertising/#respondFri, 13 Jan 2017 20:24:32 +0000http://www.coveringyourads.com/?p=1675The Federal Trade Commission (“FTC”) has been cracking down on brands for paying Instagram users to endorse their products or to share brand content without disclosing the relationship. Indeed, the recent settlements entered between the FTC and several media and entertainment companies as well as a specialty retailer make it clear that the FTC is...… Continue Reading

]]>The Federal Trade Commission (“FTC”) has been cracking down on brands for paying Instagram users to endorse their products or to share brand content without disclosing the relationship. Indeed, the recent settlements entered between the FTC and several media and entertainment companies as well as a specialty retailer make it clear that the FTC is paying close attention to endorsements of all kinds – whether by celebrities, sponsors, or paid “influencers.”

While paying an influencer up to $4,000 for an endorsing post without properly disclosing the relationship (which was the situation in one such case) is a clear violation of FTC rules, the line becomes increasingly blurred when the compensation for a praiseful Instagram post is not a payment, but rather free merchandise, an early look at a new video game, or even the expectation of some kind of payment in the future. Add into the mix non-celebrity advertisers that lack clearly defined sponsorship relationships with brands and conspicuous disclosure becomes nonexistent.

Non-celebrity driven brand messaging in social media has been on the rise and will likely continue to increase. This type of advertising brings authenticity at a fraction of a celebrity advertiser’s price tag. Often, brands simply give away free merchandise with little or no strings attached. While influencers may feel pressured to give a flattering review, they may not be obligated to do so. Regardless, consumers have a right to know whether the newest elevated blogger du jour is a true fan who selected and paid for the product she is reviewing or whether she was provided the product at no charge in exchange for writing a review. Thus, it is not surprising that FTC has been vocal about its intent to pay close attention to how these material connections between brands and influencers are disclosed to the public. And it’s not just the FTC that is growing concerned. Consumer advocacy groups, like Public Citizen, have been bringing awareness to the seemingly unfair advertising practices on social media and requesting that the FTC scrutinize influencer content more closely – especially on Instagram. In their letter submitted on September 7, 2016 (http://www.citizen.org/documents/Letter-to-FTC-Instagram-Endorsements.pdf), Public Citizen called for an FTC enforcement action against not just the paid influencers on Instagram, but also the brands that engaged these non-disclosed influencers. While it is unclear what action, if any, the FTC has or will be taking, inevitably, this heightened scrutiny may very well result in some unexpected penalties to brands themselves.

In the meantime, it is a good practice for brands to disclose their relationships with influencers on social media—even if that relationship is not clearly defined. This is especially important when brands rely on these endorsements by re-posting influencer content. For the avoidance of doubt, consumers need to be informed whenever there is a “material connection” between brands and influencers. A common way to make this disclosure in social media posts is by using hashtags. A hashtag (words or phrases preceded by a pound (#) sign) has become an integral part of social media communications, providing not only the relevant details advertisers want users to see, but also crossing over into the not so glamourous side of legal disclosures. Originally created to simplify searches within social media networks by providing a convenient way to label posts and categorize content, hashtags serve the needs of social marketing in a most unique way. Words or short phrases following a hashtag symbol not only can be powerful marketing tools, but also valuable FTC compliance allies.

The hashtag disclosures that are required must be presented “clearly and conspicuously.” Whether a disclosure meets this standard is measured by its performance—that is, how consumers actually perceive and understand the disclosure within the context of the entire ad. While the FTC admits that there is no one way to make a disclosure effective, it has been acceptable for advertisers to use hashtags like #ad or #sponsored. Of course, the more specific and clear the hashtag is the more likely that it will be FTC compliant. For example, #spon has been criticized for not providing enough disclosure because most consumers would not instantly associate it with “sponsored” content, while #sp may be misleading, as some use it in social media to denote ‘sexual partner.’

Here are some simple rules that can be followed by brands and their influencers to avoid FTC policy violations:

]]>https://www.coveringyourads.com/2017/01/articles/social-media/using-hashtag-disclosures-social-media-advertising/feed/0New York AG Addresses Cause Marketing on Social Mediahttps://www.coveringyourads.com/2012/11/articles/advertising-law/new-york-ag-addresses-cause-marketing-on-social-media/
https://www.coveringyourads.com/2012/11/articles/advertising-law/new-york-ag-addresses-cause-marketing-on-social-media/#respondWed, 28 Nov 2012 13:39:49 +0000http://socialmedialawupdate.wp.lexblogs.com/new-york-ag-addresses-cause-marketing-on-social-media/The New York Attorney General’s Charities Bureau recently released “Five Best Practices for Transparent Cause Marketing” which contains general best practices for cause marketing campaigns, including campaigns conducted on social media. Cause marketing, also known as commercial coventures, is the practice by a for-profit company of donating a portion of the purchase price of an...… Continue Reading

]]>The New York Attorney General’s Charities Bureau recently released “Five Best Practices for Transparent Cause Marketing” which contains general best practices for cause marketing campaigns, including campaigns conducted on social media. Cause marketing, also known as commercial coventures, is the practice by a for-profit company of donating a portion of the purchase price of an item or service to a charity. Cause marketing is becoming increasingly popular among companies looking to do good as well as to generate positive publicity for their brand. Many states regulate cause marketing, however, New York’s Best Practices indicate that greater attention may begin to be focused on campaigns conducted using social media and other newer online platforms for giving.

According to the Best Practices, companies and charities’ “should be no less vigilant” in their conducting of cause marketing campaigns using social media than they would be in more traditional product sales settings. Applying the general best practices to the social media setting, the Best Practices advise that:

The terms of the campaign should be “clearly and prominently” disclosed as part of the online marketing

Marketing should include:

the amount to be donated to charity per action

the name of the charity

the dates of the campaign

any minimum or maximum amount to be donated

Companies are also told to track donations in real-time for the duration of the campaign and make the progress of the campaign transparent to users. When the campaign ends or any maximum amount is reached, it should be discontinued or at least made clear to users that any subsequent actions will not result in a donation to the charity. Companies are also told, as part of the general Best Practices, to post and maintain on their website the amount of the donation made by the company as a result of the campaign.

The Best Practices focus on social media campaigns conducted on sites such as Facebook or Twitter where a donation will be made for every person who “likes” or “follows” a company. But the Best Practices should be considered in conducting other social media and online campaigns as they are a window into how at least one Attorney General will view these types of campaigns.

The bottom line is that marketers should keep in mind that an overarching theme in the Best Practices are that consumers should receive helpful and truthful information about cause marketing campaigns. Tell consumers what you are doing and what they are getting for their money or their “likes.”

COPPA currently provides that operators of websites and other online services that collect personal information online about children under 13, or whose websites or services are directed at children under 13, must:

post a clear and comprehensive privacy policy on their website or service describing their information practices for children’s personal information;

give parents the opportunity to prevent further use or online collection of a child’s personal information; and

maintain the confidentiality, security, and integrity of information they collect from children.

The proposed updates to COPPA are designed to address challenges created by technology advancement since COPPA was enacted in 1998 – Twitter, Facebook, and the iPhone and other smart phones and mobile devices did not exist in 1998.

What would the proposed updates to COPPA mean for website and online services?

COPPA’s regulations would extend to mobile devices;

websites that integrate features such as a Facebook login, advertising networks, and downloadable software kits (“plug-ins”) would need to get verifiable parental consent before collecting personal information from children under 13;

behavioral advertising tracking cookies and geo-location information would be added to the definition of personal information that marketers and website operators must get verifiable parental consent to collect; and

COPPA would allow a website that attracts both children and adults to apply privacy protections only to those who say they are under 13 (currently, such websites must treat all users as under 13).

The proposed updates to COPPA have been in the making for several years. In September 2010, the FTC solicited public comments on how COPPA might be improved. In 2011, the FTC released its recommendations. It then solicited two additional rounds of comments on its recommendations. The FTC will make final recommendations by the end of the year.

]]>https://www.coveringyourads.com/2012/10/articles/advertising-law/ftc-proposes-updates-to-childrens-online-privacy-law/feed/0Companies Using Pinterest, Be Careful Not to Get Prickedhttps://www.coveringyourads.com/2012/04/articles/advertising-law/companies-using-pinterest-be-careful-not-to-get-pricked/
https://www.coveringyourads.com/2012/04/articles/advertising-law/companies-using-pinterest-be-careful-not-to-get-pricked/#respondThu, 26 Apr 2012 13:50:14 +0000http://socialmedialawupdate.wp.lexblogs.com/companies-using-pinterest-be-careful-not-to-get-pricked/Pinterest has seen its number of daily visitors increase by 145 percent since the beginning of 2012, now counting 11 million users on its site, according to recent reports. It is a powerful social media tool by any standard, however, in recent months, with its meteoric rise, concerns have also surfaced about potential copyright issues....… Continue Reading

]]>Pinterest has seen its number of daily visitors increase by 145 percent since the beginning of 2012, now counting 11 million users on its site, according to recent reports. It is a powerful social media tool by any standard, however, in recent months, with its meteoric rise, concerns have also surfaced about potential copyright issues. Needless to say, companies are clamoring to gain access to this vast and ever increasing pool of users, but they should (and can) proceed with caution in order to stay on the right side of the copyright issues.

What is Pinterest?

If you are not among the 11 million users, Pinterest is a site that allows users to “pin” content of their own and from around the internet on an attractive display that looks much like a corkboard you would have at home or in your office. In this format, users can then follow other users’ “pinboards” and re-pin items they see on Pinterest on their own pinboards. Pinterest is linked through an app to Facebook and Twitter and provides a “Pin It” button for web browser tool bars and for websites allowing users to easily pin things to their pinboards as they see them. There is of course also a mobile phone app.

So What is the Problem?

Pinterest is set up to encourage users to pin content they find on the internet on their pinboards, but these users may not always have the right to post these images on Pinterest. It is still unclear what rights are necessary to be able to pin content on Pinterest. The pins usually involve posting entire images, so if users do not own or have a license to the image, they may not have the right to pin it. Some, however, have argued that the images are more like thumbnails with links and thus that it is potentially a fair use. In any event, the Terms of Use for Pinterest’s site place responsibility for content posted by users with the user. Thus, a user represents and warrants that she has the right to pin the item and to grant the right to others to re-pin it and agrees to indemnify Pinterest from liability for infringement.

This policy creates several issues. First, it places the burden for any infringing activity on users. Second, it may not protect Pinterest in the first place. Pinterest could still be the subject of claims for contributory copyright infringement for its actions (encouraging or aiding infringement through the site) and inactions (not taking more affirmative steps to prevent infringement). Finally, re-pinners may also be at risk if they re-pin infringing content when it is highly unlikely that the original user who pinned the item had permission to do so.

Pinterest’s Response

Pinterest has taken several steps to address concerns over copyright issues on its site. Pinterest has a Digital Millennium Copyright Act (DMCA) Policy in effect. The DMCA provides a safe harbor for organizations like Pinterest that potentially protects them from liability for infringement. The safe harbor applies when the site provides a mechanism for copyright holders to report alleged infringement to the site and then the site promptly removes the allegedly infringing content. Pinterest also offers a “no pin” code. Copyright holders can add the code to their content so that it cannot then be pinned on Pinterest, a so called opt out.

Recently, Pinterest has said that it (and its lawyers) feel that the site is protected by the DMCA. The company contends that its activities fall squarely under the safe harbor of the DMCA and that they are committed to responding efficiently to all reports of copyright infringement.

Pinterest also revised its terms of service on April 6, 2012, in addition to making other changes to its legal policies and other disclosures. The license grant from users to Pinterest no longer gives Pinterest the right to sell the pinned content. This change should alleviate some of the copyright concern. The license grant from users, however, is still fairly broad, although limited to the Pinterest site. Pinterest also made changes to make it easier for copyright holders to report copyright violations to Pinterest. Finally, Pinterest changed the Pin Etiquette rule encouraging pinners to avoid self promotion to now only encourage them to be authentic. This change comes in response to critiques that by telling pinners to avoid self promotion, Pinterest was encouraging them to post other people’s content, possibly in violation of copyright laws.

Does That Settle the Issue?

Not really. If the DMCA protects anyone, it is Pinterest and not its users. The DMCA does not provide any protection against liability to users for copyright infringement and if a user frequently posts material that is the subject of complaints of infringement, the user can have her account disabled. But the DMCA may not even protect Pinterest. To come under the DMCA safe harbor, you cannot have actual knowledge of infringement on your site. It is unclear how the general knowledge standard would apply in the case of Pinterest.

The opt out code is helpful to users as it protects them (and Pinterest) from the copyright holders who are most concerned about their content being posted on Pinterest. It also protects people and businesses who do not want their content to be pinned on Pinterest. Simply not posting content with the opt out code may not be enough, however, to protect either Pinterest or users just because they post content that does not include the code. The DMCA policy also helps copyright holders who want to prevent unauthorized use of their content on Pinterest. If you find unauthorized pins of your content on Pinterest, you can notify Pinterest through the process posted in their legal section in order to have that content removed.

The “Pin It” button appearing on a website is likely the most promising development. If a copyright holder places a “Pin It” icon with her content, it may act as an implied license to pin that content on Pinterest.

The changes to the terms of service and other disclosure language will help alleviate some of the concern about copyright issues by making it easier to address copyright infringement, relieving concern about what Pinterest will do with images, and by removing some of the social pressure to pin other people’s content. However, these changes are likely only a step in the right direction and not a panacea.

What Now?

The risks do not mean users cannot use Pinterest without violating copyright laws. So long as you own the rights to your content, you can pin it and others can re-pin it. When users pin content, they grant others the right to re-pin it on Pinterest. If you re-pin content that it is reasonable to believe was pinned by someone who can grant you the rights they are granting, then you are likely protected from infringement. For example if I post photographs that I take of a room in my home or a company posts images of its products, it is reasonable to rely upon the license I and that company are granting you to re-pin the image using the functionality of the Pinterest service. If I, on the other hand, pin one of Annie Leibowitz’s photographs of Miley Cyrus on Pinterest, it is unlikely I had permission to do so, and thus it might be unreasonable for other users to rely on my license to re-pin that image. As noted above, a relatively safe practice is to Pin content that contains the Pin It button. Users on Pinterest should also be aware of the rights to their own content that they are giving away when they post on Pinterest. You are granting to other users the right to re-pin the item on Pinterest and thus are giving up some control over that content.

Users, businesses included, who use Pinterest carefully should be able to navigate the waters successfully and open their products, services, creations, and inspirations up to the rapidly growing base of Pinners. Like any new online service there is some uncertainty and some risk, but by exercising care, much can be mitigated.